Financial History 140 Winter 2022 - Page 12

Words of Wisdom

Excerpts from the Remarks Delivered at the Virtual 2022 Museum Gala

At the 2022 Museum of American Finance Gala on March 7 , the Museum honored Leo Melamed with the Financial Innovation Award , Thomas Peterffy with the Lifetime Achievement Award , Steven T . Mnuchin with the Whitehead Award for Distinguished Public Service and Financial Leadership and John E . Herzog with a Special Recognition of Service Award for his visionary founding of the Museum . Excerpts from the remarks delivered that evening are published below .
JORDAN MELAMED Producer and Director , Outcry Films
In 1939 , at the age of seven , Leo — along with his parents , Isaac and Faygl Melamdovich — were forced to flee Poland while hiding out from the Gestapo in Lithuania . Leo ’ s father , a school teacher , gave him his first lesson in free markets . Isaac took Leo to a marketplace , where he offered a shopkeeper one Polish zloty for a loaf of bread . But the shopkeeper said , “ No . I ’ ll take one Lithuanian litas or two Polish zlotys .” His father explained it didn ’ t matter what the government said . Real value was determined in the marketplace . This lesson in foreign exchange remained deeply embedded in young Leo ’ s mind , as their odyssey of escape continued for two years , three continents and four currencies — from the Lithuanian litas , to the Russian ruble , to the Japanese yen and , finally , finding safety in the US in 1941 .
At the age of 19 , as a young law student , Leo took a summer job as a runner on the floor for the Chicago Mercantile Exchange . It was a kismet meeting of character and faith , and Leo quickly rose up the ranks to become chairman of the exchange .
At the time , CME was a backwater futures market , offering hedging on pork bellies and cattle contracts . Then Leo had an idea that revolutionized the industry . Leo said futures could work for more than just agriculture . They could protect governments and companies from currency risk : Swiss francs , British pounds , Japanese yen . In 1972 , the International Monetary Market opened for business , ushering in the modern era of risk management .
Leo led the CME in introducing contracts on Treasury bills in 1976 , Euro dollars in 1981 and stock index futures in 1982 . This once backwater exchange became the leading futures market in the world , and Leo became known as the “ father of financial futures .”
In 1987 , Leo championed breaking with the tradition of open outcry trading , embracing technology in futures . He spearheaded the introduction of CME Globex , the world ’ s first electronic futures trading system , providing users across the globe with 24-hour access to global markets . It set the standard for every major exchange in the world . Throughout the years , as chairman emeritus of CME Group , Leo has traveled the world advising governments on the development of futures markets .
Never forgetting his family heritage , Leo served on the executive committee of the United States Holocaust Museum and was a founding member of the museum ’ s committee on conscience , a sentinel against future genocide . He has authored numerous books , including his memoirs , and even a science fiction novel — not surprising , since his life has indeed been about the futures .
Who knows if a lesson from a father to a son in a Lithuanian market changed the course of financial history ? But Leo Melamed has been a pioneer , innovating and transforming the futures industry for the last 50 years . A visionary with the chutzpah to dream and the temerity to bring his dreams to life . The recipient of the 2022 Financial Innovation Award , Leo Melamed .
LEO MELAMED Chairman Emeritus , CME Group Chairman and CEO , Melamed & Associates
Allow me first to thank the Museum of American Finance for awarding me this incredible honor . I am thrilled with it . It is a privilege of great magnitude given the history and previous honorees . It is also a special honor for me to be included with this year ’ s recipients — Secretary Mnuchin and Thomas Peterffy — two outstanding Americans in the world of finance . Allow me also the thank my son , Jordan , a talented movie maker , for the introduction
10 FINANCIAL HISTORY | Winter 2022 | www . MoAF . org